We focus on the interaction between exogenous network structure and bargaining behavior in a laboratory experiment. The main question is how competition and cooperation interact in bargaining environments based on networked versions of the investment game. We focus on 3-node networked markets and vary the network structure to model competition upstream (multiple sellers paired with a monopsonistic buyer) and competition downstream (a monopolistic seller paired with multiple buyers). We describe two kinds of models of trust for such networked environments, absolute and relativized models, and use this structure to generate a general hypothesis about these environments: that information crowds in cooperation on the competitive side of the market. The experimental results support this hypothesis.

The related articles are linked below: Trust and Reciprocity in 2-node and 3-node Networks by Alessandra Cassar and me, and an overview chapter "Trust Games" by Colin Camerer from his book Behavioral Game Theory.